Post
Topic
Board Beginners & Help
Re: Is it safe to buy now?
by
pooya87
on 10/11/2021, 10:47:57 UTC
The logic for investment is buying low and selling high
This is mainly the logic behind trading not investing. When you trade, specifically in short term, you are looking for dips to buy in and to sell in a very short time afterwards.
However, when you make an investment you look at the long term potential of the asset and whether it has reached that potential yet or not.

Take start of 2020 for example. $7000 was not exactly the dip or the most optimal entry point because price went as low as $3800 after that.
In this scenario as an investor you shouldn't care about what possible dips can occur in short term but you should focus on how much potential bitcoin has at that point in time. Since $7k was still under-valued it made it an excellent entry point for an investor and if you had bought bitcoin at $7k back then, today you could have increased your money by about 10 times in only a year.

But for a short term trader, things are different. The same $7k price was a terrible entry because a trader wants to sell as soon as possible and take the profit out and shortly after we know that price dropped as low as $3.8k.

Quote
and currently Bitcoin has a new ATHs is it safe to encourage new investor to buy now seeing how high the price has gone?
As I explained a simple question should be asked (which has a hard answer):
Is bitcoin under valued or over valued right now?

My only advice is that the only time that you shouldn't buy bitcoin is when it is in a bubble, otherwise you can buy it at any time and any price and in long term you will not be sad. Right now we are at least $340,000 away from being in a bubble.

Quote
My fear for new investors is that the don't experience a dip after buying since no one is sure of how far the new highs will reach.
Anyone who is capable of seeing can look at bitcoin ~12 year price history and realize how it moves.